TaxTMI 
TaxTMI 
2023 (11) TMI 8
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....ple to Principle basis therefore the valuation of 'Heat Exchangers' was required to be determined under CAS-4 in terms of the provisions of Section 4(1)(a) of the Central Excise Act, 1944 read with Central Excise Valuation Rules.2000. In other words, the 'Transaction value' under Section 4(1)(a) is not applicable in their case." 2.1 Appellant was engaged in clearing Heat Exchanges to Original Equipment Manufacturers (OEMs) vendors who used these exchangers in manufacture of Samsung Brand Air Conditioners. These Air Conditioners were subsequently purchased by the appellant. Appellant claimed that OEMs were dependent manufacturer and therefore duty on the Heat exchanges cleared to OEMs was paid on mutually agreed transaction value, the duty was paid by the appellant on this transaction value which was based on standard cost of production plus 10% profit. Subsequently, on insistence of the revenue, appellant paid differential duty when actual cost of production became available. 2.2 Revenue issued a show cause notice dated 26.06.2008 alleging that the appellant an OEM were related person. Accordingly, the value of the Heat Exchangers cleared to the appellant was to be determ....
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.... Additional Commissioner Central Excise Noida, holding as follows:- ORDER (i) The Demand of duty of Rs.1,21,11,757/- (Rupees One Crore Twenty One lacs Eleven Thousand Seven Hundred Fifty Seven only) in respect of clearences of Heat Exchangers is hereby confirmed under Section 11 A (1) of the Central Excise Act, 1944. Since the amount is already deposited, the same stands appropriated. (ii) I Interest of Rs.9,95,669/- (Rupees Nine Lacs Ninety Five Thousand Six Hundred Sixty Nine only) leviable under Section 11 AB of the Central Excise Act, 1944 is also confirmed. Since it has already been deposited; the same stands appropriated. (iii) I hereby Impose penalty of Rs. 1,21,11,757/- (Rupees One Crore Twenty One lacs Eleven Thousand Seven Hundred Fifty Seven only) on M/s Samsung India Electronics Pvt. Ltd. Noida under Rule 25 read with Section 11 AC of the Act. (iv) The demands for recovery of Service Tax credit adding up to Rs 2,31,91,807/- (Rupees Two Crores Thirty One Lacs Ninety One Thousand Eight Hundreds Seven only) related to as such clearance of inputs/Capital Goods, for the period of Sept' 04 to Oct 15 are hereby dropped. As demand do not sustain so there is no ques....
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....present case what could be applicable in the present case is a decision of Kolkata Bench in the case of T & T Metals Pvt. Ltd. Vs Commissioner 2021 (376) ELT 545 (Tri.-Kolkata). * Extended period of limitation is not invocable and the entire demand is barred by limitation. As the appellant from beginning has informed the revenue about the nature of transaction so no suppression of fact can be alleged the view adopted by the appellant was in accordance with the various judicial pronouncements and there cannot be any malafide intention to evade duty. All the facts were in the knowledge of revenue and merely that appellant was not depositing duty as per interpretation of the Department, as alleged in the show cause notice, extended period could not have been invoked. Reliance can be also placed from the following decisions- * Anand Nishikawa Co. Ltd. v. CCE, 2005 (188) ELT 149 (SC) * Pushpam Pharmaceuticals v. CCE, 1995 (78) ELT 401 (SC); * Jaiprakash Industries v. CCE, 2002 (146) ELT 481 (SC); * Pahwa Chemicals Ltd. v. CCE, 2005 (189) ELT 257 (SC); * Continental Foundation v. CCE, 2007 (216) ELT 177 (SC); * Learned Commissioner (Appeals) has relied upon the decision of ....
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....d that the contentions put forth by the appellant above are not sustainable. I observe that the OEM vendors are so associated with the business of M/s Samsung India Electronics that it is hard to conclude that they were not having interest in the business of each other. The plea that the goods are sold on the basis of purchase orders on which Sales Tax is paid and they are not related will not suffice. The final product ie Samsung Brand Air Conditioners' manufactured by the OEM vendors by using such Heat Exchangers, are purchased back by the appellant only. Such sale cannot be treated as sale in normal course of trade. I observe that during the investigation, the appellant submitted Costing data in respect of such Heat Exchangers duly certified by Chartered Accountant which proved that the "cost of production' was more than the value on which duty of excise was discharged. It is also observed that that the appellant accepted the same and voluntarily deposited the whole of the differential duty alongwith the interest thereon. This clearly shows that initially the appellant agreed with the view of the department that the assessment of the 'Heat Exchangers' should be d....
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....a related person, nor do they allege element of flow back directly from the buyer to the seller, hut certainly, they allege that the price was not the sole consideration and the circumstance that no prudent businessman would continuously suffer huge loss only to penetrate the market and compete with other manufacturer of more or less similar cars. A prudent businessman or woman and in the present case, a company is expected to act with discretion to seek reasonable income, preserve capital and, in general, avoid speculative investments. This court in the case of Union of India v. Hindalco Industries-2003 (153) ELT 481, has observed that, if there is anything to suggest to doubt the normal price of the wholesale trade, then recourse to clause (b) of sub-section (1) of Section 4 of the Act could be made------. 50. ----------------- In other words, in the transaction under consideration, the goods are sold below the manufacturing cost and manufacturing profit. Therefore, in our view, such sales may be disregarded as not being done in the ordinary course of sale or trade. In our view. for the purpose of Section 4(1)(a) all that has to be seen is does the sale price at the factory gat....
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....rs would cost within reasonable limits. Then OEMs have to price the Air-Conditioners in a way so as to enable the Principal, who are purchasing such manufactured Air-Conditioners, to price them keeping in mind the market sensitivities. This therefore cannot be a simple operation and there is no way a comparison can be made because there is no third party sale of the "Heat Exchangers." 4.6 As regard the charge of suppression of facts. I find that during the course of visit by the officers of Anti-Evasion wing. Noida on 09/10.11.06. Shri Vimal Kumar Bajpai, DGIV (Excise) in his statement 10.11.06 informed that for discharging Central Excise duty, transaction value was taken more than 110% of the cost of production. During the course of enquiry it was noticed that sale to OEM vendors cannot be regarded as sale on principle to principle basis and as such assessable value was to be determined on the basis of CAS-4. The appellant submitted the costing data vide letter dated 03.05.07 in response to Range office letters for the period January 2006 was much higher. Accordingly the appellant themselves deposited the amount alongwith the interest. Further, vide letter dated 31.05.07 the app....
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.... by cost accountant sought 30.04.2007 The Appellant obtained the costing from the Chartered Accountant 15.05.2007 Intimated about the deposit of interest of Rs. 8,77,621/- 31.05.2007 Intimated about the deposit of differential duty of Rs. 42,42,813/- alongwith interest Rs. 1,18,048/- for Jan, 2007 to March, 2007. Intimated that for future, actual cost of previous period plus 10% will be adopted. 06.08.2007 Statement of Mr. Surendra Kumar Sharam, Vice-President was recorded 26.06.2008 Show cause notice was issued 31.01.2017 Impugned Order-in-Original passed 4.4 On perusal of the above table it is observed that appellant had paid differential duty of Rs.78,68,944/- + Rs.42,42,813/- along with interest of Rs.1,18,048/- for the entire period from 2005 to 2007 which is not disputed by the revenue and these amounts stands appropriated against the duty amount confirmed against the appellant. 4.5 All these amounts were paid much before the issuance of show cause notice i.e. on 28.03.2007 and 31.05.2007 whereas show cause notice was issued on 26.06.2008. In terms of Section 11A(2B) of Central Excise Act, 1944 reproduced below this notice should not have been issued at all, as ....